Job creation has struggled to gain momentum in Costa Rica, while business closures and corporate restructuring have resulted in the loss of at least 6,000 jobs over the past three years. Multinational companies across several economic sectors have moved all or part of their operations out of Costa Rica, closed plants, or reduced their local workforces during this period.
According to experts, the trend is partly linked to a slowdown in foreign direct investment (FDI) in some of the most dynamic free-trade-zone sectors, particularly advanced manufacturing and modern services. Agro-export companies, meanwhile, have faced higher production costs and pressure from the exchange rate.
Standard Fruit Company Costa Rica, for example, shut down operations at two banana plantations in the Caribbean and laid off 111 employees, citing the impact of the Costa Rican Central Bank’s (BCCR) exchange rate policy. In May of that same year, the company laid off another 412 workers, again pointing to the effects of the declining dollar exchange rate on its operations in Costa Rica.
The following year, Qorvo Inc., a U.S. company specializing in semiconductors and radio-frequency solutions, shut down its Costa Rican operations after 29 years, resulting in the loss of approximately 300 jobs. In July, technology giant Intel announced plans to reduce its global workforce by 15%. In Costa Rica, the company closed its Assembly and Test plant in San Antonio de Belén and transferred those operations to Asia. The move is estimated to have resulted in at least 1,500 job losses.
The layoffs continued this year. In January, Viant Costa Rica, a multinational medical-device manufacturer, announced the elimination of approximately 900 positions from its local workforce. Amazon later announced plans to cut 16,000 jobs worldwide, a restructuring that also affected Costa Rica. About 1,000 local employees were reportedly laid off in May.
In June, TicoFrut, one of Central America’s largest agro-industrial companies specializing in orange and pineapple processing, announced the dismissal of 600 workers as part of a restructuring process prompted by economic difficulties. A month later, U.S. technology company Microsoft announced 4,800 job cuts globally. Its Costa Rican operations were also affected, with the local workforce estimated to have decreased by at least 400 employees.
Also in July, Boston Scientific, one of the world’s leading medical-device manufacturers, announced a restructuring plan that includes workforce reductions and affects its operations in Costa Rica. Western Union followed in September, announcing a downsizing of its operations center here.
Not all of these job losses can be attributed to conditions specific to Costa Rica. Several stem from broader corporate restructuring, cost-cutting measures, and operational decisions affecting companies worldwide. However, companies operating under Costa Rica’s free-trade-zone regime have repeatedly warned that the exchange rate has become a significant challenge.
Many of these companies generate revenue in U.S. dollars while paying a substantial portion of their operating expenses in colones, meaning a stronger local currency can reduce their revenues in colón terms while increasing the relative weight of domestic costs
